IDW Media Holdings Class B

Good evening and welcome to the IDW Media Holdings first quarter fiscal 2023 earnings call. During management's prepared remarks, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star zero. After the prepared remarks, you're invited to participate in the Q&A. To ask a question, please press star one on your touchstone phone. To withdraw your question, please press star two. I will now turn the call over to Jen Belladeau of IMS Investor Relations. Thank you. You may begin.

Good evening. I'll take a brief moment to read the safe harbor. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the company's SEC filing, IDW assumes no obligation either to update any forward-looking statements that they have made, may make, or to update the factors that may cause actual results to differ materially from those that they forecast. Please note that the IDW earnings release is available on the investor relations page of the IDW Media Holdings corporate website. I'll now turn the conference over to Alan Grafman. Go ahead, Alan.

Thank you, operator, and thank you to everyone on the call for joining us today. My remarks on this call will provide an overview of our results for the first quarter of fiscal year 2023 and a few words on our focus strategy for the rest of fiscal year 2023 and beyond. After my remarks, Brooke Feinstein, our CFO, will provide details around our financial results, and then we will be happy to take your questions. The first quarter results demonstrated solid performance at IDW publishing. Consolidated results did not compare well with Q1 2022 for several reasons. Among those reasons are the long timeline to prepare, sell, develop, produce, and deliver entertainment projects. We are driving entertainment, publishing, and our digital initiatives with urgency. In fact, we just finished doing an IDW strategy plan for actionable steps in 2023 and beyond. We've identified more than 20 possible initiatives to fuel our growth, including many which take IDW into digital platforms to correct directly with IDW fans. We then identified these initiatives as near-term, intermediate, and long-term. These new initiatives are designed to do four things for us. First, lift our current publishing and entertainment businesses. Second, bring IDW into new digital arenas. Third, solidify IDW as the creative partner of choice. And fourth, reward long-term shareholders. Now let's focus on our most recent results. Our first quarter 2023 results had a challenging comparison with the first quarter of 2022, primarily based on the fact that in Q1 of 22, we recognized 4.3 million in entertainment revenue, from the full delivery of Lacking Key Season 2, while IDW Entertainment generated no meaningful revenue in fiscal year first quarter 2023. Also contributing to the negative comparison in Q1 2022, we generated almost $2 million in publishing revenue related to the fulfillment of the direct-to-consumer games campaign for Batman Adventures. Now, let's take a closer look at our individual business segments. A primary focus at IDW Publishing is to continue driving increased print sales of both original and licensed properties. Print sales are a consistent source of revenue for our business with relatively steady revenue performance. We anticipate that our print titles will continue to provide reliable, predictable revenues moving forward. Anchoring our print distribution is our solid partnership with our distributor, Penguin Random House. In a meeting with their CEO last week, they and their leadership told me that IDW is viewed as a partner of choice. In addition to our print revenues, we are working to increase revenues through digital initiatives. We are migrating to a new digital platform to be hosted by Shopify, and it's going to be completed in two stages in fiscal year 2023. This migration will give us greater control and ability to have a direct connection with our loyal customers. At IDW Entertainment, the strong results in Q1 2022 illustrate the positive financial rewards that entertainment transactions produce. However, for entertainment, moving from original idea to development agreement to production, and finally delivery to a buyer, it takes a considerable amount of time, consistent effort, and patience. It's important to remember that as we continue to scale the entertainment side of our business, There will be quarters where we are rewarded by our ability to take a creative vision all the way to TV or other platforms. And there will be other quarters where we won't recognize much revenue from our IDW entertainment as we shepherd projects through the process. We view fiscal 2023 as an important transition year for IDW and a crucial part of our journey towards creating sustained shareholder value. Our publishing division has established a strong reputation around its ability to discover new creators and maximize the potential of their unique content. We partner with creators to help them reach new audiences and at the same time grow our IP library. Our entertainment business has already demonstrated the ability to develop and deliver premier projects such as Lock and Key, Surfside Girls, Winona Earp, and V Wars to top tier partners like Netflix, Apple TV, and sci-fi. While expenditures on TV shows have declined a bit recently, it is still an enormous addressable market, and IDW Entertainment only needs a few shows to go into production, that is, greenlit, to be successful. We have nearly a dozen projects that have been optioned and are in various stages of development that we are pushing forward. So to summarize, IDW's strategy is, first, Continue to increase our industry recognition so that we are the first name that comes to mind when talented creators are looking for a home to develop their original content. Second, publish inventive and compelling comics and graphic novels that resonate with broad audiences. Third, further develop our published content entertainment vehicles for streaming services, TV shows, and other platforms. And fourth, move into new sectors where we can monetize our RP with a focus on digital and direct-to-consumer, there is a lot of work to be done. IDW is well positioned to fully exploit our content library to develop and deliver premium projects throughout our entire business. We are focused on the opportunities that we are seeing to drive long-term growth and value as a leading independent media entity. And we remain one of the very few ways, perhaps the only way, for investors to participate in the comic book, graphic novel, television sectors. Your entire IDW leadership team is committed to fulfilling IDW's potential. Now I'll turn the call over to Brooke Feinstein, our CFO, to go over our financials for the first quarter of 2023.